Shortly before the House adjourned for the August district work period, the Subcommittee on Financial Services and General Government of the House Appropriations Committee passed the Fiscal Year 2026 Financial Services and General Government Appropriations bill. Amongst the agencies funded by this bill is the Federal Trade Commission(FTC). The bill reduces the FTC’s budget by $37 million or 8.7%. The bill also forbids the FTC from using taxpayer funds to make any changes in the pre-merger approval process.
This stops the FTC from implementing Biden-era FTC Chair Lina Khan’s proposed revisions to the Hart-Scott-Rodin Act (HSR) pre-merger notification form. Businesses planning a significant merger must file this form with the FTC and the Justice Department’s Antitrust Division for “pre-approval” of the merger.
Khan's proposed revisions to the form add to the burden placed on businesses required to seek “pre-approval” of a merger or acquisition. The FTC estimates the new form will add approximately 68 hours to the time it takes businesses to prepare the pre-approval form. An analysis by the law firm Vinson and Elkins shows that the revisions create “significant additional burdens for filing parties, including expanded document productions, increased reporting of buy-side structures, minority shareholders, and information about certain officers and directors, and new narrative responses about relationships between the buyer and the target.”
The new appropriations bill also forbids the FTC from using taxpayer funds to “collaborate with the European Union, United Kingdom, or People’s Republic of China on merger reviews, investigations, or enforcement actions.” Khan regularly worked with overseas antirust regulators to impose new burdens on US companies. For example, despite continually complaining that her agency was underfunded, Chair Khan spent taxpayer money to send FTC staffers to Brussels to help implement the Digital Markets Act (DMA). The DMA forces large technology companies (designated as “gatekeepers”) to provide access to their intellectual property and operating systems to their smaller competitors. The DMA thus represents a major violation of the property rights of “big tech” companies. Five of the seven companies currently designated as “gatekeepers” by the EU are American.
Why would Lina Khan spend taxpayer money helping the EU regulate US companies? One reason may be that the DMA outlaws “preferencing.” This is where a tech company manipulates algorithms to display its own products at the top of a search. A ban on preferencing assumes that consumers are too lazy or stupid to scroll through more than one page of results to find “name” brands. It also opens the door to treating the major platforms as public utilities—which would be a disastrous policy. No wonder Congress has refused to pass legislation outlawing preferencing. So, Chair Khan used taxpayer funds to help the EU prevent American tech companies from engaging in preferencing even though (or maybe because) preferencing does not violate US law!
Khan may have also influenced the UK’s Competition and Markets Authority (CMA) to reverse its position on Microsoft’s proposed acquisition of video game manufacturer Activision. The CMA initially indicated that it would approve the merger, but reversed course after CMA officials met with Lina Khan. Khan denied asking CMA to change its position, but CMA documents regarding the Microsoft-Activision merger reference discussions of the merger with foreign officials. Thus, it seems that Chair Khan or one of her allies at the FTC did influence CMA’s decision to reverse its position.
Chair Ferguson has denounced the Digital Markets Act, suggesting that whatever issues free-market conservatives may have with him, he recognizes that Khan’s policy of “cooperating” with foreign antitrust regulators is not the way to Make American Great Again. This is a step in the right direction, but it is still important for Congress to formally prohibit the FTC from working with foreign antitrust regulators. This is because codifying the prohibition in the final appropriations legislation will make it easier to include in future spending bills, thus preventing the next “progressive” to chair the FTC from working with foreign governments to make American companies less competitive and undermine Congress’s authority. This also applies to the language forbidding the use of funds to block implementation of Lina Khan’s proposed changes to the pre-merger approval forms. Therefore, all supporters of limiting the FTC’s power over the American economy should hope these provisions make it into the final spending bill that Congress will be working on this fall.
